The clothing, or ready-made garment, industry in Bangladesh is a breadwinner for the country. It has undergone a remarkable evolution from traditional production to embracing cutting-edge technologies. It has gone through a process of trial and error, transitioning from handmade clothing to mass production. The evolution, which has spanned more than four decades, has been fascinating!

But as the industry has matured, it has been a kaleidoscope of changes. Its transformation has made the sector pivotal to the country’s economic growth. Yet its future appears to hinge significantly on several factors – namely sustainability, digitalisation, customisation and adaptability. These factors are poised to play an essential role in shaping the industry. Sustainability will be key to responding to changing landscapes. It will entail eco-friendly practices, tech integration, preference personalisation and adaptability.

After the covid-19 pandemic of 2020, trends within the sector show that setbacks resulting from the pandemic scarred the global apparel industry, including Bangladesh’s clothing sector. This period of economic slowdown has witnessed numerous factories grappling with temporary closures, dwindling orders and supply chain disruptions. Despite covid-19-induced blowback, the clothing sector’s pivotal role in shaping Bangladesh’s industrial landscape remains steadfast. This underscores the need to direct special policy attention to the sector.

A fresh start

Post covid-19 pandemic, since 2021, the global clothing market has shown some resurgence. In Bangladesh, clothing export orders have demonstrated a gradual uptick. According to data from Bangladesh’s export policy agency, the Export Promotion Bureau, the ready-made garment sector remains the cornerstone of the country’s export earnings. In 2021–2022, Bangladesh’s export earnings from the clothing industry were a staggering 82% (which was USD 42.6 billion) of total export revenue. Within the clothing exports, knitwear accounted for 55%; the other 45% comprised woven garments.

However, a looming challenge for Bangladesh’s export landscape relates to whether the clothing sector can keep pace with tech advancements. The industry’s success will hinge on its innovation ability to be competitive in the global market. Any abrupt shift in the new Industrial Revolution will affect every part of the clothing world. Bangladesh’s garment sector could face the brunt of Industry 4.0, potentially losing 2.7 million jobs, or 60% of the sector’s workforce.

Bangladesh’s garment sector could face the brunt of Industry 4.0, potentially losing 2.7 million jobs, or 60% of the sector’s workforce.

A new approach in apparel

Global apparel sourcing has leaned towards cost efficiency, marked by the emergence of ‘fast fashion.’ This is apparel’s response to the fashion industry. Fast fashion involves the rapid production and sale of inexpensive trendy clothing, designed to be replicated swiftly. Fast fashion needs to continually refresh retail inventories. This model is characterised by lower production costs, streamlined operations and increased consumer spending. It works like magic. It led to a 60% rise in consumer spending on clothing between 2000 and 2014.

Brands like Zara, H&M and Topshop frequently update their clothing offerings, deviating from the traditional seasonal approach to clothing production. Before fast fashion, garments were created seasonally. It took a year to progress from conception to the customer’s possession. This contrasts sharply with the rapid turnover of fast fashion, which requires new designs to reach showrooms within weeks. The fast fashion transition has encountered environmental scrutiny and had ethical ramifications.

Models are showcasing a creative collection with intricately designed dresses for the ‘Ponds presents the Lustrous Runway’ at Radisson Ballroom, Dhaka, Bangladesh, 28 November 2014 | Photo by Mahmud Hossain Opu.

The clothing industry now demands accelerated production and reduced lead times. Digitisation and automation are needed to keep pace with the swiftly changing markets. Automation is poised to significantly revolutionise clothes manufacturing. At the same time, shifting consumer preferences, cultural influences and demographic shifts will shape future fashion trends. While change remains inevitable, the question is: how can Bangladesh navigate it?

The Industry 4.0 outlook

The integration of Industry 4.0 technologies can help Bangladeshi garments pivot towards sustainability and efficiency. The adoption of emerging tech such as artificial intelligence, augmented reality and big data analytics can transform manufacturing processes to consumer experiences.

For example, technology company Lectra proposes that its Apparel 4.0 solution (which integrates internet-of-things – IoT – tech) could increase forecast accuracy by 85%, while cutting inventory costs by 20–50%. Its findings also suggest a notable 20–50% rise in market speed, a 10–20% reduction in cost to market and an overall productivity boost of 2–3%. This is all remarkably promising.

IoT refers to devices equipped with sensors, processors and software that can share data via the internet or communication networks. IoT-based companies can produce personalised products at scale while remaining profitable. For instance, an industrial IoT-based solution can help in transitioning from mass production to mass personalisation by creating a virtual representation of a factory floor, capturing real-time events and contextualising data for better decision-making.

This trend has been on the rise, popularly known as ‘accurate fashion.’ It aligns with the changing trends within the fashion industry. Meeting consumer demands requires attention to nuances. It requires tailoring apparel to precisely match subtleties. For instance, the accuracy of fashion often aligns with significant global sporting or entertainment events such as the Olympics or the Met Gala. Adaptability is key because the clothing demand may fluctuate based on the outcomes of the events. Thus, the ability to produce multiple small-volume series allows companies to offer diverse designs, fostering agile growth. As a result of this trend, the average manufacturing lead time has reduced from 120 days to 90 days.

The apparel manufacturing industry accumulates vast amounts of data, including on design, colour, production specifics and customer essentials. The big data can help the industry forecast market trends, identify operational risks, break down customer preferences and develop business models.

The catch for Bangladesh

While fresh tech promises efficiency and productivity, policy-makers worry about job displacement, particularly for less-skilled workers. As per a 2017 analysis by the McKinsey Global Institute, automation could induce a loss of 800 million jobs worldwide by 2030.

The World Economic Forum’s ‘Future of Jobs’ report, published annually, supports this, indicating a gradual replacement of human-held positions by machines. But the research also anticipates that millions of new jobs will be created as a result of new technologies.

This presents a glimmer of hope! Yet the pressing question remains: how will Bangladesh’s clothing industry adapt to this brain-driven tech-job creation? Thus, striking a balance between technological adoption and upskilling the workforce will dictate the future of the apparel industry in Bangladesh.

…striking a balance between technological adoption and upskilling the workforce will dictate the future of the apparel industry in Bangladesh.

Greening industries

Bangladesh’s garment industry has substantial environmental impact owing to its resource-intensive production, chemical reliance and waste generation. Cotton’s heavy water use and pesticide reliance exacerbate the environmental strain. Human-made fibres, while seeming eco-friendly, release non-biodegradable components like microplastics.

The Bangladeshi clothing sector has acknowledged this harm and has embraced ‘green manufacturing.’ It has decided to employ innovative technologies to optimise energy, water and other resources. New alternatives like waterless dyeing, bio-based fibres and waste-to-fabrics conversion have been introduced. Bangladesh now boasts the world’s most environmentally conscious garments sector, featuring over 150 factories that adhere to the stringent standards outlined by the US Green Building Council’s certification on Leadership in Energy and Environmental Design (LEED).

This extensive number of LEED-certified ‘green’ factories surpasses those of any other nation. It has firmly established Bangladesh as a sustainable manufacturing frontrunner. These green factories use 40% less energy and 30% less water, significantly reducing their carbon footprints when compared with conventional factories.

Yet the hard reality is that industry emits a lot of greenhouse gas. Here, a policy conundrum will kick in. Initiatives like the EU’s Carbon Border Adjustment Mechanism, which is a policy tool to tackle carbon emissions, poses concerns for Bangladeshi garments. Simply put, implementing a carbon tax may burden small businesses in the manufacturing supply chain. Bangladesh needs to smartly navigate this complex relationship between industry, environment and policy.

The garment’s future in a different Bangladesh

By 2026, Bangladesh will transition from United Nations classified least developed to a developing country, a process popularly known as ‘LDC graduation.’ This means Bangladesh will become a more advanced economy.

Bangladeshi exports, which are dominated by clothing, mainly reach the countries of the Global North. The country’s current least developed status means it benefits from duty-free export privileges to various European nations. Meanwhile, the EU has extended its Generalised System of Preferences (GSP) trade support to Bangladesh until 2029. But Bangladesh has to think beyond this point. Post-2029, the country will encounter an average 12% duty when exporting clothes to certain markets.

Furthermore, upon LDC graduation, Bangladesh will face a 17% most-favoured-nation tariff when exporting garments to Canada. Compounded by other countries’ preferential trade agreements, Bangladesh faces serious competition.

To understand the competition, Bangladeshi policy-makers can take note of preferential trade deals such as Vietnam’s Comprehensive and Progressive Agreement for Trans-Pacific Partnership with Australia, Canada, New Zealand and others. Vietnam’s agreements inculcate preferential tariffs for textile exports to these markets.

In addition, the African Growth and Opportunity Act between sub-Saharan African countries and the US provides duty-free access for the former to the US market. This represents an economic boost to countries like Kenya, Ethiopia and Lesotho. India is another competitor of Bangladesh, given its extensive cotton production, coupled with numerous free trade agreements, potentially leading to duty-free access in export markets.

Thus, looming changes in global trade pose a direct threat to Bangladesh’s clothing exports. Immediate implementation of mitigation policies will protect the country’s clothing sector.

Policy interventions

Sustaining Bangladesh’s garments industry demands a long-term solution-driven strategy. In this regard, specific recommendation include:

  • Invest in innovation and new technology across materials, design and production processes to sustain competitiveness.
  • Reform the education system to align the modules of education institutions with the industry’s needs.
  • Provide training on specialised equipment (including emerging ones) and advanced manufacturing technologies pertinent to garment production.
  • Allocate resources for research and development to promote circularity in the industry, develop sustainable materials and apply eco-friendly designs.
  • Enforce stricter environmental regulations to minimise the sector’s ecological footprint. Subsidies, tax breaks and investment incentives can facilitate eco-friendly practices in manufacturing.
  • Encourage transparent business practices between buyers and sellers, including human rights due diligence. For this, there is a need to communicate reasons behind any price adjustments to consumers.
  • Establish a Technological Upgradation Fund to support entrepreneurs in procuring modern machinery, to ensure competitiveness within the industry.
  • Boost government initiatives to showcase the industry’s strengths to major global importers.
  • Encourage diversification from basic garments into higher value-added products.
  • Sign free trade agreements and preferential trade agreements to secure benefits for the clothing industry.

Bangladesh needs to allocate resources for research and development to promote circularity in the industry, develop sustainable materials and apply eco-friendly designs.

Navigating Bangladesh’s transformation phase needs a concerted effort from the government and industry players. The challenges that the country’s clothing industry faces are multifaceted but so are the opportunities. The opportunities are in embracing innovation, sustainability and bold negotiations. With a solid track record, Bangladesh’s garment sector can thrive in the evolving global markets.

 

Cover © Prototype of a face mask sewing system at the Industrial Sewing and Innovation Center in Detroit, Michigan, United States, August 2021 | Photo by ISAIC.

Photo © Mahmud Hossain Opu

Sulav Chowdhury is CEO of Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA). He is a corporate professional. He was Managing Director and CEO at SPHR Group. He is a member of the International Criminology Society, London. He pursued his graduate studies in criminology at Middlesex University, London.